Revised 1/22/189.1

GUIDE TO FAIR HOUSING

The Civil Rights Act of 1968, including its 1988 Amendments (“FHAA”) outlawsdiscrimination in housing including all public or private housing, single-family units or multi-unit apartments. The law applies to virtually every aspect of housing: Marketing, touring, rental terms, conditions, and evictions. Illegal discrimination is discrimination against any individual who is amember of any of the following protected classes: race, color, national origin, gender, (including LGBTQ) religion, disability, and familial status. Ohio law designates two (2) additional protected classes: ancestry and military status. Also, local ordinance may include additional protected classes such as sexual orientation, source of income and age.

Fair Housing prohibits conduct which is discriminatory in its effect, regardless of the motivation or intent. Violations of the Act can even result from thoughtlessness and a lack of information as well as deliberate discrimination.

The FHAA also establishes an enforcement mechanism through the Department of Housing and Urban Development (HUD). After the investigation of a complaint and failure to achieve conciliation, HUD can make a determination of whether probable cause exists to believe that a discriminatory housing practice has occurred or is about to occur.

If a determination is made that such probable cause exists, then the Secretary shall issue a charge on behalf of the complainant against any person alleged to have committed, or be about to commit a discriminatory housing practice. Upon issuance of the charge, either the complainant or the respondent may elect to have the charge determined in a judicial proceeding. In the absence of such an election, the charge will be determined in an administrative hearing before an administrative law judge.

If the parties allow the complaint to be heard before an administrative law judge, the charge will be prosecuted by HUD attorneys and the Federal Rules of Evidence will govern. The administrative law judge is directed to commence the hearing within 120 days after the filing of the charge, if practical, and to render a decision within 60 days after the hearing, if practical. The administrative law judge is authorized to grant relief equivalent to what a private plaintiff could obtain in a civil action in Federal court, plus more.

The administrative law judge is authorized to grant injunctive relief, to award damages to the complainant (which could include damages for intangible injuries such as emotional injury or distress), and to impose civil penalties (payable to the Treasury) to vindicate the public interest of up to $10,000 for a first offense, up to $25,000 for a second offense within five years, and up to $50,000 for a third offense within seven years. If the repeat violations have been committed by the same person, the increased fines may be imposed without regard to duration of time during which the violations occurred.

If the party elects to have the charge determined in a judicial proceeding, then the charge must be referred to the Justice Department, which within 30 days of such referral shall commence and maintain on behalf of the complainant a civil action in Federal District Court.

The complainant may intervene in the action, but intervention is not necessary in order for the complainant to obtain relief, including the right to monetary relief. The court is authorized to grant injunctive relief and any other relief, which could be obtained by a private plaintiff in a direct private action, including actual damages and punitive damages.

At the State level, housing discrimination charges are handled in a similar way by the Ohio Civil Rights Commission.Also, HUD may refer any Charge filed with HUD to the Ohio Civil Rights Commission for investigation and determination.

The FHAA also made other important provisions to the enforcement of the Act, including the following:

1. The statute of limitations for the filing of a complaint with HUD was extended from six months to one year after the discriminatory housing practice occurs or, in the case of a continuing violation, terminates. The statute of limitations for a private action in Federal Court is extended from six months to two years.

2. HUD is authorized to commence investigations and file complaints on its own initiative, without action of a private complaint.

3. The Amendment makes it a crime to commit bias by interfering with equal housing opportunities through coercion, intimidation or threats.

As a result of the FHAA, the process of auditing and checking is very common. This means that people who are not actually seeking housing "test" to ascertain whether or not equal treatment is being provided. The checking is entirely legal and very important in the enforcement process. In most metropolitan areas, a regional fair housing organization exists. The office provides racial demographic data, housing availability information and assistance to those seeking housing as well as to property owners and managers regarding fair housing.

INDIVIDUAL RESPONSIBILITY

The FHAA outlines fines and civil penalties that could not only be levied against the management or owner of a property, but fines and penalties can be imposed personally against any person or employee who has committed an act of discrimination, including an individual owner, officer, property manager, maintenance or housekeeping person, or landscaper employed by the company. Therefore, Property Managers of K&D Management, LLC must work with the company to make all employees on the property aware of all Fair Housing principles and guidelines. Fair Housing concerns must be reported immediately to the Corporate Office so that a problem employee can be instructed about the proper way to treat all people visiting or residing on the property.

It is the responsibility of each employee of K&D to insure that all persons seeking housing information and opportunities are treated fairly and equallywithout regard to race, color, national origin, gender (including LGBTQ), religion, disability, familial status, ancestry or military status. Uniform treatment is the key to achieving fair housing for the public and each employee should adopt as his or her own personal philosophy the precepts of fair housing which is of course the law of the land.

OCCUPANCY STANDARDS

As stated in the FHAAno assignment can be made to any person to a particular section of a community, or a particular floor of a building because of race, color, religion, gender (including LGBTQ) familial status, disability or national origin. This means that any qualified applicant can rent any premises that are available in the time period that the applicant is considering to move. But the Department of Housing and Urban Development has acknowledged that in appropriate circumstances management companies may implement reasonable occupancy requirements based on factors such as the number and size of sleeping areas or bedrooms, and the overall size of the dwelling. Occupancy requirements must follow county or city occupancy codes.

The number of occupants should, therefore, be listed on a rental application. If occupancy standards are exceeded due to household composition change, the Property Manager should meet with the residents and advise the residents that they are in violation of their lease and therefore subject to eviction. If the unit becomes overcrowded due to additionaloccupants coming into the household, the Area Manager may require the family to move at the end of the lease due to a violation of state or local occupancy standards.

EQUAL CREDIT OPPORTUNITY ACT

The Federal Equal Credit Reporting Act prohibits discrimination based on race, color, religion, national origin, sex, marital status, age, or dependence on public aid in the granting of credit. Credit applicants must be considered only by criteria based on income, net worth, job stability and satisfactory credit rating.

SUMMARY

The importance of adhering to ethical business standards cannot be overemphasized. K&D can maintain a good reputation by demonstrating ethical and fair treatment to all those who apply for and lease at a K&D property. Federal, State and local laws prohibit discrimination in housing based on certain protected classes. Yet ethical questions will arise. Is it unlawful to turn down a rental application if you suspect the applicants are drug abusers? Is it unlawful to turn down an application if the applicants have a poor credit rating or an unacceptable reference from their prior landlord? Is it unlawful to turn down an application on the basis of an applicant’s net income? No...These are permissible issues in which every management company has the right to make their own decision.